"Random musings about Life, love and Politics. Just my open diary on the events going on in the world as I see it."

Multinational corporations: The new colonisers in Africa June 19, 2009

cc flickr.comSurveying
a history of exploitation of Africa's people and resources, Lord Aikins
Adusei denounces the multinational corporations continuing to plunder
the continent's natural wealth. Situating today's ongoing exploitation
of African resources within an established tradition of external
interference, Adusei decries the ability of corporations to avoid
paying taxes and keep dictators indifferent to their citizens' plight
in their pocket. But with the emergence of China as a viable funding
alternative to the World Bank and the International Monetary Fund
(IMF), the author concludes that the 'second colonialism' driving
Euro-American globalisation may be at an end.

Before the end of the first period of colonialism African nations
were properties of their colonial masters who did what they could to
rape the continent of whatever resource they deemed good for the
development of their citizens in Europe.

Out of nowhere and without any consultation with the people of the
African continent, the Europeans met and divided the continent amongst
themselves in what has been termed 'The Scramble for Africa'.

Through this scramble France, Britain, Belgium, Spain, Portugal,
Germany and Italy all went on a looting spree, raping Africa of her
resources without putting any of the proceeds back for the development
of the continent.

When US President Franklin D. Roosevelt visited Gambia on 13 January
1943, he was so appalled by the conditions of Gambians that he made
this lamentation:

'It's the most horrible thing I have ever seen in my life… The natives
are five thousand years back of us… The British have been there for two
hundred years – for every dollar that the British have put into Gambia,
they have taken out ten. It's just plain exploitation of those people.'

He continued, telling his son Elliot, 'I must tell [Winston] Churchill
what I found out about his British Gambia today. This morning, at about
eight-thirty, we drove through Bathurst to the airfield.' (Elliott
notes that it was here that his father began speaking with 'real
feeling in his voice'.) 'The natives were just getting to work. In rags
… glum-looking…They told us the natives would look happier around
noontime, when the sun should have burned off the dew and the chill. I
was told the prevailing wages for these men was one and nine. One
shilling nine pence. Less than fifty cents.'

'An hour?' Elliott asked.

'A day! Fifty cents a day! Besides which, they’re given a half-cup of
rice. Dirt. Disease. Very high mortality rate. I asked. Life expectancy
– you’d never guess what it is. Twenty-six years. Those people are
treated worse than the livestock. Their cattle live longer!'[1]

And the exploitation was not peculiar to Gambia. The Gold Coast (now
Ghana), Nigeria, the Ivory Coast, Zaire (now the Democratic Republic of
Congo (DRC)), Namibia, South Africa, Congo and Angola all suffered from
the same colonial exploitation and underinvestment.

For almost 300 years the Europeans, who were supposedly civilised,
devout Christians, irresponsibly looted Africa’s resources and made
slaves of its natives without developing their colonies. When the local
population protested against this exploitation without reciprocal
investment, they were brutally crushed, as happened in the Congo, where
King Leopold II of Belgium looted the resources, made slaves and killed
close to 10 million Congolese.

In 1904 to 1907 the German, led by Commander-in-Chief Lothar Von
Trotha, committed their first genocide of the 20th century by killing
90 per cent of the Herero and the Namaqua people of South West Africa
(now Namibia) when the people protested against the exploitation of
their resources. And the sad stories of South Africa, Zimbabwe,
Algeria, Namibia, Kenya and Angola, where people were denied access to
land, citizenship and basic rights and had to take up arms before they
were granted independence, are in many history books. We know how
Nelson Mandela (now a hero in Europe) and a number of freedom fighters
endured long prison sentences, torture, exile and deaths in the hands
of their 'devout Christians' and 'civilised' European colonisers. The
idea was that through The Scramble for Africa they had bought Africa
and had power to do as they wish, hence the rape, torture, genocide and
mass killings.

While Europeans became richer, Africans became poorer. For example,
with the looting of the Congo’s resources, enslavement, the amputations
of hands and 10 million deaths, Brussels – which now doubles as the
capital of the European Union – and Belgium were built.

When they were given their ‘freedom’, the fathers of independence
inherited nothing more than empty treasuries. They realised that after
more than 300 hundred years of colonial rule their colonial masters had
left them nothing; no money and no infrastructure.

This bad situation and their eagerness to improve the lives of their
peoples forced them to turn to the International Monetary Fund (IMF)
and World Bank for assistance, and when they went lo and behold their
former colonial masters were there waiting for them. The colonisers
used their majority votes to dictate to the World Bank and IMF about
how these former colonies should be helped. Of the 185 members that
make up the IMF, six colonial masters and their allies – comprised of
the United States, Germany, Japan, the United Kingdom, France and Italy
– control 42 per cent of the votes.

The colonial masters dictated to the IMF and the World Bank that for
Africans to be helped, they had to open their economies to allow
European corporations in. This underscores the numerous
conditionalities that are associated with loans from these
institutions. The conditionalities are nothing more than a smokescreen
designed to ensure that Europeans never lose their grip on the
resources of their former colonies. Some of these conditionalities
include instituting secret memorandums of agreement, subsidies to
foreign corporations and massive tax concessions (such as income tax,
usage fees and property tax) – the primary source of revenue for
'export-oriented', developing countries.

The sad thing is that Africans thought independence would give them
respite to develop, but this was never to be as the colonial masters
used their corporations and intelligence services to deliver vengeance
on the people. They encouraged and financed civil wars, unashamedly
polluted rivers, wells and the soil through their oil and mineral
activities, deliberately understated their profits and falsified profit
documents, as well as undervaluing their goods, indulging in smuggling,
theft and the falsification of invoicing and non-payment of taxes, and
employing kickbacks and bribes to public officials. They also
overpriced projects, provided save havens for looted funds, promoted
the sale of guns, overthrew African leaders, supported dictatorships
and assassinated those who disagreed with them. We know, for example,
the tragedy of Patrice Lumumba and the support the West gave Mobutu.

The corporations forced onto Africa by the IMF, the World Bank, the US
and Europe have been implicated in a number of cases for corrupting
African leaders and stealing trillions of dollars worth of resources.
Global Financial Integrity says that '$900 billion is secreted each
year from underdeveloped economies, with an estimated $11.5 trillion
currently stashed in havens. More than one quarter of these hubs belong
to the UK, while Switzerland washes one-third of global capital
flight.' Of this $900 billion, $150 billion comes from Africa.

'The idea that Switzerland has a clean economy is a joke; it is a
dirt-driven economy,' says Richard Murphy, director of Tax Research
LLP. The Swiss Bankers Association claims that four-fifths of the
nation supports banking secrecy, which reveals a society deeply
embedded in a culture of impunity and exploitation. The fact is that
those who steal must find a way to hide their loot, and Switzerland
provides the ideal environment for such crimes to take place. And it is
not Switzerland alone that does not have a clean economy. Britain,
France, Germany, Luxembourg can all be described as vampires.

'This policy is especially lethal for developing countries where the
poor are now caught in tax brackets, courtesy of the IMF and World
Bank’s structural adjustment programmes (SAPs), instituting policies
ranging from “tax holidays” to the privatisation of state services
[and] carving out huge slices of natural capital at corporate auctions…
Africa has collectively lost more than $600-billion in capital flight,
excluding other mechanisms of flight including ecological debt
(globally estimated at a potential $1.8-trillion per annum), the cost
of liberalised trade (just under $300-billion) … and the list goes
on…'[2]

Thus with the support and collusion of the IMF and the World Bank these
corporations are paying close to nothing for the resources they take
from Africa.

Africa has been labelled the world’s most corrupt region because
multinational internal mis-pricing makes up 60 per cent of capital
outflow, with corporations declaring profits in tax havens, as opposed
to the country of performance. Corporations declare about 40 per cent
of their profits in the African countries where they operate, siphoning
the rest into their safe-haven accounts in order to avoid paying tax
which could be used to eradicate poverty. And this is not the end of
the corruption and the story of daylight robbery.

We know how Elf operated as an arm of the French state supporting
dictators, looting resources and establishing a flush fund used to
bribe African leaders to look the other way while the corporation
looted Africa’s oil and gas.

The author of Poisoned Wells Nicholas Shaxson wrote of the subject:
'Magistrates discovered the money from Elf’s African operations
supplied bribes to support French commercial, military and diplomatic
goals around the world. In exchange, French troops protected compliant
African dictators.'

This explains why there are so many more corrupt dictators in
French-speaking Africa compared with elsewhere in Africa. Gabon's Omar
Bongo, Togo's Gnassingbé Eyadéma, Zaire's Mobutu Sese Seko, Guinea's
Lansana Conté, Côte d'Ivoire's Félix Houphouët-Boigny, Burkina Faso's
Blaise Compaoré, Congo's Sassou Nguesso and Chad's Idriss Déby are some
of the compliant leaders who were or have been protected by France. And
what happened to the non-compliant African leaders? Your guess is as
good as mine. Please find time to read more about Bob Denard, a
Frenchman who made a career as a mercenary overthrowing African
leaders. French author Jean Guisner says: 'Denard did nothing that was
contrary to French interests – and he allegedly acted in close
cooperation with French intelligence services'.

In the Elf corruption case André Tarallo, the real boss of Elf-Afrique,
'told the court in June 2003 that annual cash transfers totalling about
£10m were made to Omar Bongo, Gabon's president, while other huge sums
were paid to leaders in Angola, Cameroon and Congo-Brazzaville. The
multi-million dollar payments were partly paid to ensure the African
leaders' continued allegiance to France. In return for protection and
sweeteners from Elf's coffers, France used Gabon as a base for military
and espionage activities in West Africa.'[3]

The real deal is that Elf, Shell, BP and their counterparts in Europe
and America pay bribes to African leaders to induce them to look the
other way when they plunder resources. Ask any Gabonese or Congolese
whether they have benefited from the oil and diamonds and the answer
will be a big no. What is so tragic is that the people know they have
oil, diamonds and see these companies processing them everyday yet do
not know where it goes, who buys them and where the proceeds go.

In the UK former Prime Minister Tony Blair was accused of selling a
device based on ageing technology to Tanzania. 'The UK sold a useless
air traffic control system to Tanzania in 2001 in a scandalous and
squalid deal, the House of Commons was told.' Clare Short, an minister
of parliament, said, 'The deal was useless and hostile to the interests
of Tanzania.' She continued, 'Barclays Bank had colluded with the
government by loaning Tanzania the money, but lying to the World Bank
about the type and size of the loan.' Short said, 'Tanzania could have
paid much less for the same equipment which cost them £28m'. Shadow
International Development Secretary Andrew Mitchell said 'BAE had used
ageing technology and said the system was not adequate and too
expensive.'[4]

And it all happened after they had bought Tanzania officials to look
the other way while a device based on ageing technology was being sold
to the country. BAE colluded with Tony Blair and Barclays Bank to sell
a useless commodity at an exorbitant price to Tanzania. This is nothing
but a continuation of the contempt and impunity with which Europeans
have traditionally treated Africa before, during and after colonialism.
BAE is indirectly saying that Africans do not deserve the latest
technology even if they pay a cut-throat price. It is also a message to
Africans that they must develop their own technology and not rely on
the generosity of others.

It is no secret that the Shell oil company colluded with Nigeria's
corrupt Abacha regime to steal oil, pollute the country's rivers,
wells, creeks and soil and render millions of farmers and fishermen in
the Niger Delta jobless. '[Shell] admitted that it inadvertently fed
conflict, poverty and corruption through its oil activities in the
country. Nigeria contributes to about 10% of Shell's global production
and is home to some of its most promising reserves, yet the country is
steeped in poverty and conflict.'[5] So Shell, in addition to stealing
Nigeria’s oil and polluting its rivers, wells and soils, also promotes
corruption, poverty and conflict.

In the DRC about five million people have died in a war, the underlying
motive for which is the satisfaction of the West's insatiable appetite
for high-quality, low-price cell phones, laptop computers,
Playstations, jewels, diamonds and coltan. And in Paris, London,
Brussels, Berlin, New York or Washington, who cares about five million
deaths anyway? Why has the DRC's war not ended? Who supplies the rebels
their arms and who buys the minerals they mine illegally? Why have
Ugandan and Rwandan forces crossed several times into DRC? And whose
agenda are they pursuing? A report by the UN says it all.

The panel calls for financial restrictions to be levied on 54
individuals and 29 companies it says are involved in the plunder,
including four Belgian diamond companies and the Belgian company George
Forrest, which is partnered with the US-based OM Group.

The individuals named include Rwandan army Chief-of-Staff James
Kabarebe, Congolese Minister of the Presidency Augustin Katumba Mwanke,
Ugandan army Chief-of-Staff James Kazini and Zimbabwean Parliament
Speaker Emmerson Mnangagwa, BBC online reported.[6] The report also
accused 85 South African, European and US multinational corporations –
including Anglo American, Barclays Bank, Bayer, De Beers and the Cabot
Corporation – of violating the Organization for Economic Cooperation
and Development's (OECD) ethical guidelines on conflict zones.

The guidelines they were accused of violating relate to arming Rwandan,
Ugandan and Congolese rebels and profiting from their illegal looting
of Congo’s minerals, as the following excerpt shows:

'Despite the recent withdrawal of most foreign forces, the exploitation
of Congo's resources continues, the report says, with elite networks
and criminal groups tied to the military forces of Rwanda, Uganda and
Zimbabwe benefiting from micro-conflicts in the D.R.C. "The elite
networks derive financial benefit through a variety of criminal
activities, including theft, embezzlement, [the] diversion of public
funds, [the] undervaluation of goods, smuggling, false invoicing,
non-payment of taxes, kickback[s] to public officials and bribery," and
added that such pillaging is responsible for much of the death and
malnutrition in eastern D.R.C.'[7]

And so while millions die in Africa with the complicity of these
corporations, European and North American citizens, with all their
hypocrisy, live to enjoy lavish holidays. And when Africans try to
reach Europe the citizens say 'Europe is full. No more immigrants.'
Where do the queens and kings in Europe get the diamonds and gold that
they show off? Is it not from the blood diamonds from Congo, Sierra
Leone and other conflict zones in Africa that are smuggled out and sold
in Brussels, Zurich, London and New York?

And this is not their only crime. We know how Halliburton established a
$180-million flush fund and bought Nigerian officials to secure a
$10-billion oil contract. We know Acres International of Canada paid
$260,000 to secure an $8-billion dam contract in Lesotho. We know
Swiss, British, German and French financial and banking institutions
have made fortunes by providing safe havens for funds looted by Abacha,
Mobutu, Bongo, Conté, Kenya's Daniel arap Moi and the rest of the
dictators in Africa. And it is no secret that Belgium is angry with the
DRC government for inviting China into the country because they are
privy to and beneficiary of all the daylight robbery going on in the
resource-rich but economically impoverished country.

Africans know that these corporations are making fortunes but they see
none of the benefits from these fortunes. Ghanaians know gold and
diamonds are being mined at Obuasi and Akwatia but they do not know
where it goes, who buys them and where the proceeds end up, and the
same is true of the oil in Nigeria, Gabon, Cameroon, Algeria, Angola
and Equatorial Guinea. And as for the DRC, a nation with one-third of
world’s natural resources, the less I say the better.

This corrupt, daylight robbery is what has been promoted as
globalisation, with Africa and the Third World being encouraged to join
by Europe, America, the IMF and the World Bank. My question is whose
globalisation? Is it the globalisation that only those with blue eyes
enjoy or what? If the answer is no then the IMF and the World Bank
should explain why the world is divided between the 'white haves and
the coloured have-nots'. Is this not a second colonialism dressed as
globalisation?

Susan Hawley says it all:

'Multinational corporations’ corrupt practices affect the South (i.e.
Africa, Asia and Latin America) in many ways. They undermine
development and exacerbate inequality and poverty. They disadvantage
smaller domestic firms and transfer money that could be put towards
poverty eradication into the hands of the rich. They distort
decision-making in favour of projects that benefit the few rather than
the many. They also increase [the] debt that benefit[s] the company,
not the country; bypass local democratic processes; damage the
environment; circumvent legislation; and promote weapons sales. Bribes
put up the prices of projects. When these projects are paid for with
money borrowed internationally, bribery adds to a country's external
debt. Ordinary people end up paying this back through cuts in spending
on health, education and public services. Often they also have to pay
by shouldering the long-term burdens of projects that do not benefit
them and which they never requested.'[8]

And in all these, the Western media has kept silent and has not raised
a voice against what its governments, intelligence services,
corporations and businessmen are doing to Africans. They prefer instead
to criticise China for courting the same African leaders Euro-Americans
have been protecting for decades. A clear hypocrisy isn’t it? These are
the same criticisms King Leopold II levelled against the Arabs who were
competing with him for resources and slaves in Congo, and we know what
Leopold II, the 19th-century Hitler, did in the DRC in the name of
Christianity and 'civilisation'.

With China as a fierce competitor, Africans now have a choice not to go
to the World Bank and the IMF for conditional loans. They also have a
choice to either give their resources to Chinese companies or European
and American cartels. It may be the beginning of the end of
colonialism, slavery, instability, dictatorships, corruption and all
the ills that Europeans and Americans have been promoting in Africa.

It may be the beginning where Africa’s resources will be bought and
payment made to the people and a new chapter that will usher in
Africa’s development and close the poverty gap from 5,000 years to
perhaps 100, as observed by Franklin D. Roosevelt.